In a significant financial move, Trump Media has announced plans to raise $2.5 billion by selling $1.5 billion in stock at its last closing price, along with $1 billion in convertible notes priced at a 35% premium. This strategic decision reflects the company's commitment to bolster its financial standing and invest in cryptocurrency assets.
The funds raised will be directed towards acquiring bitcoin, which will be held on Trump Media's balance sheet alongside existing cash and short-term investments amounting to $759 million as of the end of the first quarter. The bitcoin holdings will be safeguarded by renowned crypto platforms, Anchorage Digital and Crypto.com, ensuring secure custody of these digital assets.
Devin Nunes, CEO of Trump Media, emphasized the company's vision by stating, "We view bitcoin as an apex instrument of financial freedom." He hailed this initiative as a significant step forward in the company's strategy to acquire key assets in alignment with America First principles, highlighting the importance of cryptocurrency in the modern financial landscape.
Despite the ambitious plans, shares of Trump Media, the parent company of Truth Social—a streaming and social media platform—experienced an 8% decline following the announcement. This move is part of a broader trend where public companies are increasingly adding bitcoin and other cryptocurrencies to their balance sheets, particularly as the Trump administration expresses support for digital assets.
In a related development, last month, Cantor Fitzgerald revealed its partnership with Tether and SoftBank Group to establish Twenty One Capital, a new entity focused on bitcoin acquisition, resulting from a merger with the blank-check company Cantor Equity Partners. The combined entity boasts a valuation of $3.6 billion, further emphasizing the growing interest in cryptocurrency investments.
Trump Media is actively exploring potential mergers and acquisitions to diversify its portfolio, particularly into financial services. Recently, the company reached a binding agreement to launch various retail investment products, including crypto and exchange-traded funds (ETFs) that align with Trump’s policies.
The Trump family, traditionally associated with real estate and country clubs, has ventured into the world of cryptocurrency, rapidly accumulating hundreds of millions of dollars. Their crypto initiatives include launching Trump NFTs, a meme coin, and acquiring a stake in a newly established bitcoin producer named American Bitcoin, along with investments in World Liberty Financial, a decentralized crypto platform that features a stablecoin pegged to the U.S. dollar.
However, these bold moves have not gone unnoticed, attracting scrutiny from lawmakers. Democratic Senator Elizabeth Warren, for instance, recently inquired about the plans of the U.S. securities regulator to oversee ETFs that Trump Media intends to launch. As the landscape of cryptocurrency continues to evolve, the implications of these investments and regulatory responses will be closely monitored by industry stakeholders.
Reporting by Aditya Soni and Arsheeya Bajwa in Bengaluru, along with Hannah Lang in New York; Edited by Shilpi Majumdar and Rod Nickel.
